# Car Insurance Premiums Surge for Drivers With Poor Credit Scores Drivers with low credit face steep insurance hikes, but strategic adjustments can lower costs. - **Source:** [NerdWallet](https://brifing.si/source/47fee75b-2b5e-493d-9ac3-f012b6c37891) - **Published:** 2026-11-10 - **Topic:** [Finance](https://brifing.si/c/finance) - **Original article:** - **On Brifing:** https://brifing.si/s/ba253dd1-4bb4-477a-bbbe-3a8f06ec0a6e ## Rising Costs for Drivers Between January 2023 and January 2026, auto insurance premiums for drivers with poor credit surged by 37.7 percent. A median annual premium of 2,864 dollars rose to 3,944 dollars during this period. This increase significantly outpaced the rate hikes experienced by drivers with good credit who had recent driving violations. ## Credit as a Risk Factor Insurers utilize credit-based insurance scores to predict the likelihood of future claims and loss costs. While controversial, industry experts argue these scores accurately reflect risk-taking behavior. Statistical analysis suggests that drivers with the lowest credit scores have average losses per policy 64.6 percent higher than those with the best credit. ## Regulatory Regional Differences The use of credit scores in setting insurance rates is not universal across the United States. States including California, Hawaii, and Massachusetts explicitly prohibit insurers from using credit history as a factor in pricing. In other regions, insurers maintain that this data is essential for maintaining accurate and fair risk assessment. ## Impact of Driving Violations The financial burden is compounded when poor credit is combined with negative driving incidents. Drivers with poor credit and a recent DUI saw premiums increase by over 40 percent. This specific profile faced the largest price hike among all categories analyzed in the 2026 report, highlighting the severity of combined risk factors. ## Strategic Comparison of Quotes Because every insurance company employs unique pricing formulas, shopping around remains the most effective way to find relief. NerdWallet data shows that in nearly half of U.S. ZIP codes, the cheapest insurer for a driver with poor credit differs from the cheapest provider for a driver with a good credit profile. ## Adjusting Policy Coverage Details Drivers can lower premiums by raising their deductibles, which signals a lower likelihood of filing minor claims. Additionally, dropping collision and comprehensive coverage for older vehicles can reduce costs significantly. However, drivers must ensure they have the liquid savings to cover potential repair expenses if an accident does eventually occur. ## Payment and Claim Habits Small behavioral changes can influence how insurers perceive risk over time. Signing up for automatic payments prevents missed deadlines and may provide minor discounts. Furthermore, avoiding the filing of minor claims, such as windshield cracks, helps maintain a cleaner record, allowing policyholders to save their coverage for more serious financial losses. ## Long-term Credit Improvement While building credit is a common recommendation, it is often difficult for individuals in low-wage jobs or those lacking access to credit resources. Improving a score can lead to lower premiums, but the impact varies by insurer. Each company sets its own thresholds, meaning a score may be viewed differently across providers. ## Navigating the Insurance Market The 2026 Auto Insurance Rates Report analyzed over 1.4 billion rate estimates to track these trends. While credit scoring remains a standard industry practice, consumers can mitigate costs through diligent research and policy adjustments. Understanding how individual insurers weigh credit is vital for managing personal finances in the current economic climate. ## Sources covering this story - https://www.nerdwallet.com/insurance/auto/learn/credit-score-auto-insurance-rates — --- _Summary written by Brifing from the original reporting. Copyright in the original article belongs to its publisher; read the full piece at the link above._